Banks give government loan
Yesterday in a post budget seminar held at the Happy Valley Hotel, Stanley Matsebula chairperson of the Swaziland Bankers Association disclosed that banks have given government about E4 billion in indirect and direct loans. Over E1.6 billion is in lieu of the Treasury Bills and Bonds, and rest is loans given to the civil servants, companies and SMEs that borrowed money to do business with the government. This seminar was hosted by Corporate Skills Centre in collaboration with the Bankers Association and the Central Bank of Swaziland. The local banking sector is alive to risks associated with giving out much money to the state despite being major supporter of the government funding.
Total exposure to the government whether indirect or direct, is in excess about E4 billion. They believe that as banks they have assisted government to manage their cash flow by directly lending to the civil servants. It is as opposed to the civil service getting the soft loans from the government payroll. The seminar was attended by retired former deputy Governor of the South African Reserve Bank Dr. Xolile Guma who also as a lecturer at University of Swaziland (UNISWA) worked in Swaziland. The local banks are further faced with the threats of survival since loans extended to the civil servants, Matsebula explained.
